Information from the Nikkei Asia Review, published on November 27, informed that Vietnam's financial technology start-ups (FinTech) are about to catch up with Singaporean rivals in attracting venture capital in Southeast Asia.
Of the total investment capital in FinTech in Southeast Asia, the rate of venture capital invested in FinTech in Vietnam has increased sharply from 0.4% in 2018 to 36% in the first 9 months of this year while this rate in Singapore is 51%, experiencing a slight slip from 53% in 2018.
Mr. Wong Wanyi, manager in charge of FinTech at PwC Singapore, said: "In Vietnam, payment is leading. In my opinion, so far, the fields that are really attractive in developing economies will be those that are consumer-based". PwC Singapore is the partner of United Overseas Bank and the FinTech Singapore Association to develop a report on FinTech companies in Southeast Asia.
With an annual double-digit growth rate, digital payments are expected to become the payment method of choice in nearly 50% of transactions between now and 2025, and will exceed USD 1,000 billion as FinTech companies are “exploiting” about 300 million adults in Southeast Asia, who do not have a bank account or do not have access to investment, credit and insurance facilities.
After attracting only USD 35 million in venture capital funding in 2014, the total amount of venture capital invested in the FinTech sector in Southeast Asia has increased sharply over the past five years and reached USD 679 million in 2018.
Since the beginning of the year, the venture capital investment in FinTech in Southeast Asia has reached USD 1.14 billion. Singapore still dominates the FinTech sector in the region as 45% of Southeast Asia's FinTech companies are based here. Singapore-based FinTech companies are also operating in other areas, led by insurance, payment and personal finance technologies.
Regarding the ability to attract investment capital, VNPay, which provides digital payment solutions in Vietnam - ranked first in the report on venture capital investment in FinTech in ASEAN, with the total capital in funding agreements for this year estimated at USD 300 million. Singapore Life Insurance Company ranked second with deals worth USD 110.3 million, while Vietnam's MOMO Pay wallet ranked third with the amount of USD 100 million.
Multinational online payment platform Akulaku is Indonesia's leading company in attracting venture capital and is sharing the fifth position with Singapore's accounting and finance company Deskera with agreements worth USD 40 million in total.
All 10 leading positions in attracting investment into FinTech are in Singapore, Vietnam or Indonesia. Meanwhile, Thailand, Malaysia and the Philippines accounted for less than 2% of Southeast Asia's total FinTech investment, a sharp decrease from about 10% in 2018, partly because many companies want to invest in Vietnam and Indonesia to tap the huge number people who have not yet conducted transactions via banks in these two countries.